Ferrari public listed on Borsa Italiana, completes separation from Fiat Chrysler Automobiles

Ferrari-Italian-Listing

Ferrari made its trading debut at Milan’s Borsa Italiana (the Italian Stock Exchange) on Monday under the ticker “RACE”. The listing completes the supercar maker’s separation from the Fiat Chrysler Automobiles (FCA) group.

The ceremony, attended by Ferrari chairman Sergio Marchionne, FCA chairman John Elkann, Ferrari CEO Amedeo Felisa, Ferrari vice chairman Piero Ferrari, Borsa Italiana CEO Raffaele Jerusalmi and Italian PM Matteo Renzi, took place less than three months after the company’s debut on the New York Stock Exchange.

FCA boss Marchionne underlined the fact that Ferrari’s listing in Milan represents a new start, rather than a point of arrival, emphasising that the now complete spin-off from FCA reaffirms the independence Ferrari has always enjoyed within the group.

Ferrari 488 GTB Maranello 66

For the NYSE listing, Fiat Chrysler listed a 10% stake at US$52 a share, valuing the famous prancing horse brand at nearly US$10 billion. For this parallel listing in Milan, FCA distributed its remaining 80% to shareholders, at a rate of one Ferrari share for every 10 FCA shares.

The new company counts Exor SpA, the Agnelli family holding company that also controls Fiat Chrysler, as majority stakeholders with 23.5%. Piero Ferrari, son of founder Enzo, retains his 10% stake. Fiat bought a 50% stake in Ferrari in 1969, before increasing its holding to 90% in 1988. Fiat merged with Chrysler in 2014 to create FCA.

According to Bloomberg, Marchionne has been positioning Ferrari as a creator of high-end products, rather than as an automaker, to entice investors. It is certainly as valuable as a luxury goods brand – at 26.5 times estimated 2016 profit, it’s on par with Hermes. To compare, FCA fetches 8.6 times earnings and GM is worth 6.4. The Maranello-based small-volume company is the most profitable stand-alone automaker, according to Evercore ISI. Generous dividends have been promised.

Reports note that this spin-off will help FCA reduce debt and fund grand plans to expand higher-margin luxury brands Alfa Romeo and Maserati, which the group retains. With Ferrari, which accounted for 12% of FCA’s profit before interest and tax in 2014, off the group’s books, Marchionne’s plans for Fiat, Chrysler, Jeep, Alfa Romeo and Maserati will be in the spotlight.

There will be an update of the FCA masterplan at the end of this month, but the current 2018 targets are an ambitious seven million units, almost two million more than IHS Automotive’s estimates for the group, Bloomberg notes. It will be interesting to see how they plan to achieve it.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

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